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NPL much higher than reported
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at state-owned commercial banks and 17.81 per cent at public specialised development banks.
Talking to The Daily Star yesterday, he said the total amount of classified loans in banks would be two to three times higher than the reported amount.
Mansur said there were important issues relating to the corporate governance of banks.
“Importantly, public banks are not within the purview of Bangladesh Bank. As such, there are serious concerns about the quality of the board and top management of these banks. Furthermore, their compliance with prudential regulations is weak,” he said.
“The experience of the past few years has shown that the lack of autonomy of the central bank sometimes undermines the conduct of sound monetary policy and the granting of licences to new banks,” Mansur continues.
The risks of political interventions in the functioning of the central bank must be averted to establish a healthy banking system, he added.
Apart from Mansur, PRI Vice-Chairman Sadiq Ahmed, State Minister for Planning Shamsul Alam, Executive Director of the Institute of Microfinance and Development Mustafa K Mujeri, Executive Director and CEO of the Center for Research Initiatives Neaz Mujeri, Executive Director of the South Asian Network on Economic Modeling (SANEM) Selim Raihan, PRI Chairman Zaidi Sattar, SANEM Chairman Bazlul H Khondker, Chairman of the Research and Policy Integration for Development (RAPID) Society Mohammad Abdur Razzaque, Chairman of Bangladesh Securities and Exchange Commission (BSEC) Shibli Rubayat-Ul-Islam, academic and researcher M Rokonuzzaman and PRI Director Sarwar Jahan also have articles in the book.
The book contains articles on a wide range of issues -- Bangladesh’s development, national planning, agriculture, its achievement and challenges, growth of manufacturing and readymade garment and way forward, remittances, financial sector, ICT, urbanisation, poverty reduction and social security.
It highlights Bangladesh’s advancement in various socio-economic areas with a focus on the future.
“The policy makers of Bangladesh can breathe a sigh of relief that it has now been able to put an end to stigma of once-being known as an international basket case. Bangladesh is now following the path of Asian miracle countries proving the doubters wrong,” said the state minister for planning in his article.
However, he said, essentially there remains a few major challenges ahead -- the sustainability of economic transformation, the ease of doing business, an improved regulation framework for attracting foreign direct investments, institutional reforms, governance, climate change, and expanding fiscal space.
In his article on the manufacturing sector, the PRI vice-chairman said Bangladesh has made remarkable progress in the manufacturing sector.
“Nevertheless, there is a sizable unfinished agenda. First, the strong growth in RMG exports has not been repeated in any other manufacturing activity due to a policy dichotomy. The special facilities enjoyed by the RMG sector is not generally available to all exports,” he said.
Consequently, while a large number of export items have emerged, they have not had comparable success. Some are struggling to survive while some have already exited. Even items that showed early promise, like leather and footwear, have failed to take off in the way that RMG had, he said.

Govt to revise
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“A GDP growth of 6 per cent without fanning inflationary pressures would be a good achievement,” he said.
Hussain says often the government increases expenditure and relaxes monitoring policy and loan facilities to lift GDP growth.
“But it will be risky in the current context. Nothing has been done in the area of monetary policy to address inflation. Initiatives have so far been taken to protect the foreign currency reserves.”
The government borrowed about Tk 29,000 crore from the central bank in the first five months. “It is a kind of monetary injection that accelerates inflationary pressure,” he said.
Hussain urged the government to pay attention to load dispatch management in order to cut losses before raising power prices.
According to a World Bank study on load dispatch management, had the least-cost principle been followed, Bangladesh Power Development Board would have saved $1 billion annually.
“Then, the government could have controlled inflation through efficient load management,” Hussain added.